California Gets Serious About Pilot Program to Replace State Gas Tax

For years, policymakers and economists around the country have been well aware that the federal gas tax is dying.

In its report to Congress, the National Surface Transportation Infrastructure Financing Commission, on which I was honored to serve, made clear that we must replace the 18.4 cent federal gas tax with other means of funding transportation in order to maintain and improve our highways, bridges and transit systems in the United States.

The commission recommended a road user charge as the most effective approach to solving this problem.

[If] we fail to address the immediate funding crisis and longer-term investment challenge facing our surface transportation system, we will suffer grim consequences in the future, the Commission wrote in its 2009 report.

Now, California is rolling out a pilot program to study the exact same concept – giving its residents a chance to pioneer what could become a long-term funding solution to fix the state’s crumbling infrastructure. The pilot, created by SB 1077, authored by Sen. Mark DeSaulnier, D-Concord, will examine the feasibility of assessing motorists a fee based on mileage driven on the state’s roads. Gov. Jerry Brown signed the bill in September 2014.

The state is looking to this strategy because its 18 cent gas tax, which California has historically relied on to fund the bulk of repairs to its transportation network, has not increased in decades despite inflation. More people are putting pressure on our highways than ever before, but fewer people are buying gas due to improved fuel efficiency – shrinking the amount of money available for projects.

The California Department of Transportation (Caltrans) is currently seeking 5,000 state drivers to volunteer to take part in the road user charge model and help the Legislature decide whether to adopt it permanently. Caltrans expects to choose its group in mid-May of this year, representing a range of the state’s different regions, demographics, income levels and vehicle types to participate in the 9-month pilot scheduled to begin in July.

It costs nothing to enroll and participate in the program; those chosen to test the concept will select from several mileage reporting techniques and simulated payment methods, but no money will be exchanged. Those interested in signing up should act quickly by visiting: Sign Up | California Road Charge Pilot Program.

Helping to fuel the road user charge concept across the country, President Obama in December 2015 signed the Fixing America’s Surface Transportation (FAST) Act, which included money supporting the research and development of similar state pilot programs. Shant Boyajian, who recently joined Nossaman’s Infrastructure Practice Group, served as senior counsel to the U.S. Senate Committee on Environment and Public Works, and assisted with the bill, which provides long-term funding certainty for the nation’s surface transportation system.

As the federal and state governments continue to grapple with the difficult subject of sustainable infrastructure funding, the road user charge could replace the gas tax with a reliable means of funding a safe, well-maintained network of highways, bridges and transit systems to serve many generations to come.

  • Geoffrey S. Yarema

    Founder and former chairman of Nossaman’s Infrastructure Group, Geoffrey Yarema has spent more than three decades developing national best practices for innovative procurement, contracting and financing structures that ...

Nossaman’s 30-plus infrastructure attorneys offer clients, colleagues, strategic partners and industry media a wealth of practical experience, insider insight and thoughtful analysis here on Infra Insight. We blog about what we know best, from industry-leading procurements to local and national policy developments that affect the market and our clients.

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